So you’ve officially taken the first steps to financial freedom by finally tackling your credit card debt. You’ve worked out a realistic repayment plan and set a comfortable timeline for reaching milestones.
But now comes the hardest part—keeping yourself motivated so you stay the course.
It’s easy to feel overwhelmed or become discouraged when trying to go after a personal goal, whether it’s to hit the gym more or finally get out of the red. Stats bear this out: Nearly half of Americans make New Year’s resolutions each year, yet only about 8% actually succeed, according to a University of Scranton study published in the Journal of Clinical Psychology.
Don't look at the dismal numbers and decide to throw in the towel. Tackling debt means changing your habits—and then taking baby steps along the way to keep up your momentum and reach your goal, financial experts say.
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“It’s really important you don’t make [paying down debt] so daunting that it’s impossible to succeed,” says Scott Mazuzan, CFP®, a private client advisor at F.L.Putnam Investment Management Company in Portland, Maine.
“If you wanted to be a runner, you wouldn’t run a 10K every day, seven days a week, because you would hurt yourself and then give up, right?” Mazuzan says. “So you set goals that are small enough that it’s almost impossible to fail—like $10 more [than] the minimum payment to start with." Then, inspired by your success, "maybe notch it up the next month and the month after that.”
No matter how determined you are, you're bound to experience moments when your resolve goes into free fall. To get back on track, arm yourself with these motivation boosters—they'll help you stick to your payoff plan.
Strategy #1: Know Why You Want to Be Debt-Free
The benefits of paying off the plastic are obvious: Your credit rating will go up, and you'll no longer be snowed under by scary bank statements. But identifying the deeper, more personal reasons driving you will help ground you in your goal.
Start by asking yourself, “What’s important to you about being debt-free?” says Saundra Davis, a financial coach and executive director of Sage Financial Solutions in Pinole, California. "How will your financial life become more focused?”
Let’s say your primary aim is to get closer to buying your dream home in the next five years. Figure out your deeper MO: Does owning a home represent security? Something to call your own? A place your children can return to no matter where they are in the world? Knowing what erasing debt really means to you gives it more meaning. The financial sacrifices will come easier, and you'll be motivated to keep your repayment plan going.
Strategy #2: Keep Your Goal In Sight—Literally
The old photo-in-the-wallet trick really works: Having a visual on hand that represents financial freedom can keep your mojo from flagging. "It's a mental reminder of why you’re setting limits on your spending," explains Olivia Mellan, a Washington, D.C.-based money coach, psychotherapist and co-author of the book “Money Harmony: A Road Map for Individuals and Couples.”
To bring this trick into the digital age, make the background image on your desktop or cellphone a snapshot relating to your goal—maybe of the beach in Bali you're dying to visit one day or the sweet two-bedroom condo in a better part of town. If you need multiple motivation boosts at once, create a Pinterest board of “Money Goals” with captions reminding you what each means to you.
Visualizing what you hope to get from paying down your credit card debt will help you remember why you committed to this journey in the first place. As the saying goes, out of sight, out of mind—but the opposite is true, too.
Strategy #3: Track Everything
Maintaining close tabs on what you save and what you spend doesn't sound like anyone's idea of a fun way to pass the time. But knowing that you're sticking to your plan and seeing your debt decrease month by month is hugely inspiring and will power your resolve.
How exactly should you keep track? There's no right way. Resources like Vertex42 and PowerPay offer personal finance spreadsheet templates as well as handy credit card payoff calculators. Budgeting apps or even online resources from your bank can keep you better apprised of your progress by helping you track expenses, payments and deposits.
No matter how you choose to do your tracking, set up appropriate check-in points (daily, weekly, monthly or quarterly), so you can hold yourself accountable, measure your progress and make adjustments if needed. When you can see your spending habits laid out before you, you'll feel inspired to keep at it, and it’ll be much easier to pinpoint where you need to make changes.
As you track your spending, add in notes to help you monitor your feelings about each purchase, says Mellan, who also recommends maintaining a handwritten spending diary for that purpose. (Think: “I treated myself to fro-yo because I’ve had a hard week.”) Reflecting on the emotions behind your spending and how the purchases make you feel can shine a light on any unhealthy money patterns holding you back.
Strategy #4: Celebrate Small Milestones
Made an extra payment last month? Passed the halfway point paying off one card? Congrats—now give yourself props. Acknowledging small successes celebrates the hard work you're doing and gives you something to look forward to every time you reach a milestone.
Rewarding yourself can mean anything from giving yourself a silent high-five to treating yourself to a mini-splurge like a latte, spa session or cocktail with a friend. “I always tell people not to be afraid to enjoy themselves, because if you just focus on throwing every dollar toward a pay-down goal, you’ll be miserable and you’ll probably give up,” says Mazuzan. No matter how tight your budget is, there's room for some kind of indulgence, and it's important for quality of life too, he says.
To this end, Mazuzan recommends starting a special “rewards” fund, which he likens to a credit card rewards program. So for every dollar over the minimum payment made towards your debt, send 1% cash back to the account—and use only that money to pay for your small splurges.
Strategy #5: Stop Beating Yourself Up
According to a 2016 report by NerdWallet, the average U.S. household owing money carries $16,061 in credit card debt—translating into an overall total of $747 billion of debt among American consumers.
In other words, you’re far from the only one with a personal balance sheet problem. And even if you follow your plan to a perfect T, at some point, it’s almost guaranteed that you'll have occasional slip-ups, either via last-minute emergency expenses or a moment of weakness while out window shopping.
“What happens with people is, as soon as they hit the first bump—think of it like a New Year’s resolution about exercise—as soon as you break your cycle, as soon as you fall off the wagon, if you will, the shame builds up so much that it’s hard to recapture your momentum,” Davis explains.
When it occurs, don’t let guilt devour you and don't put yourself down. Remind yourself that no one is perfect and then take a moment to reevaluate your plan. Do you need more outside support? Should you adjust your timeline or pay-down amount? Are you truly ready to tackle your debt? In the end, course-correct, cheer yourself on for what you have accomplished and keep going, says Mazuzan.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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